8 Feb 2010 10:14

Moscow press review for February 8, 2010

MOSCOW. Feb 8 (Interfax) - The following is a digest of Moscow newspapers published on February 8. Interfax does not accept liability for information in these stories.


Bashneft has submitted to the Federal Financial Markets' Service the mandatory offer for the buyback of common shares of five new subsidiaries - the Ufa oil refinery , the Novoufimsk oil refinery , Ufaneftekhim , Ufaorgsintez and Bashkirtnefteprodukt. In December and January it purchased them from the key shareholder - AFK Sistema paying 41.1 billion rubles. Back in April 2009 Sistema assumed control over the energy sector companies in Bashkortostan but did not make the offer stating difficulties with bank guarantees as the reason. Bashneft did not disclose the price of the offer. Its representatives do not say what the purchase of the shares of subsidiaries will cost it. ("Billions for the Vertical")

Russia will cease to be the biggest market for Gazprom in 20 years. The corporation plans to boost sales by one third by 2030 with all this amount being exported. The management believes that the entire increase in domestic demand should be met by independent producers. As a result their share of the domestic market should go up to 33-40% up from 27% in 2008. ("Gazprom (RTS; GAZP) flees from Russia")

Gazprom has been dragging for over two years out the acquisition of control over RUSSIA Petroleum that owns the license for the giant Kovykta gas field. The license may be recalled soon - the Natural Resources' Ministry has decided to check how the field is being developed. Kovykta is one of Russia's biggest fields with reserves of 2.1 trillion cubic meters. ("Time to recall", also in Kommersant p. 11 "Kovykta will go under Rosprirodnadzor")

Shalva Chigirinsky and Ruslan Baisarov are negotiating an amicable agreement concerning a shareholder of Sibir Energy - Gradison Consultants which controls 23.35% in the oil company, a source close to Sibir has told Vedomosti. The talks have lasted for several months and may be completed before the end of March, the source said. Chigirinsky was unavailable for comments while Baisarov refused to make any comment. ("Peace at Sibir Energy").

The Finance Ministry has chosen organizers for the placement of its first Eurobond issue since 1998. Credit Suisse, Barclays Capital, Citibank as well as VTB Capital will be placing the bonds, the ministry reports. The selection criteria included experience in the placement of sovereign securities and operations in Russia, the size of the compensation and the proposed placement strategy. The earnings of the organizers will amount to 5 base points ($2.5 million given a volume of $5 billion - Vedomosti), Deputy Finance Minister Dmitry Pankin believes. ("To sell for 0.05 %")

Vedomosti has learned that Tekhnosila, a major Russian household electronics and appliances retailer, may soon see a change of ownership. The companies to which its main assets belong have seen such a change already. The retailer now owes banks $400 million to $420 million. MDM Bank is its biggest creditor with $220 million. Last September the bank assigned part of the debt - $50 million - to Nomos Bank . There are two ways out of the situation: debt restructuring or the sale of the business together with debts. "There is nothing to take as far as the business is concerned," a source close to Nomos shareholders told the newspaper. MDM Bank will be working to assume control over the Tekhnosila business, a source close to the bank said. ("Tekhnosila demonstrated Weakness")


After Gazprom recognized the closure of the U.S. gas market the development of Russia's biggest Shtokman gas condensate field has been suspended. The operator of the first stage of the field, Shtokman Development AG, decided to put off the beginning of extraction by three years to 2016-2017. Experts believe that in conditions of the global financial crisis the question of raising funding for the project with a price-tag of $14 billion to $18 billion and vague prospects of gas markets remains open. (p. 9 "Putting Brakes on Shtokman")

The government is suspending purchase interventions on the grain market and assigning 5 billion rubles to stop overstocking of elevators with grain from the intervention fund. First Deputy Prime Minister Viktor Zubkov made the decision at a conference in Kursk. The United Grain Company should export up to 3 million tonnes of grain from the fund in the nearest future. However, Sergei Levin, head of the state gas trader, says that the compensation will be sufficient only for the sale of 1.5 million to 2 million tonnes and that the government will have to spend 3 billion to 4 billion rubles more on logistics. (p. 2 "Interventions ordered to stop")